Reduced price makes solar photovoltaic power generation more competitive

In 2011, solar photovoltaic power generation in Germany surged by 60% to 18 billion kilowatt-hours, more than 3% of the nation's electricity supply, and enough for about 51 million households. The results are really exciting, but currently German PV manufacturers are facing tremendous pressure.

The economies of scale and fierce competition from China's solar photovoltaic industry have led to a sharp drop in the prices of photovoltaic modules and a corresponding decline in the prices of solar photovoltaic power generation. Compared with other traditional energy generation models, the competitiveness of solar power has been significantly improved. However, this has brought a lot of impact on some manufacturers that rely too much on government clean energy subsidies.

As the world's largest photovoltaic market, Germany currently has a total installed capacity of 24 million kilowatts. The prosperity of the photovoltaic market in Germany has led to a decline in the price of photovoltaic power generation worldwide, making solar energy, an expensive “noble power”, an effective alternative to fossil fuels. From India, the Middle East, Africa, and North America, solar power is becoming a more viable and highly respected alternative power source.

As PV power gradually approaches the homes of ordinary people at a price close to the “civilian price,” the sharp decline in global PV module prices has caused some equipment manufacturers to fall into the cold winter. Under the impact of the market tide, Solyndra of the United States and Solon of Germany had to file for bankruptcy protection. Once the future star Solyndra has become a yellow flower, the US government has still been criticized for its loan of US$528 million to Solyndra.

Jeremy Rifkin, climate change and energy security adviser for the German government and the European Union, said: “The large decline in photovoltaic electricity prices is unexpected. However, this is a good thing.”

An American economist also said: “This is indeed a huge success. Those who are criticized for this (photovoltaic price reduction) are too ignorant. In fact, the PV price reduction is like the replacement of computers or communication systems, and the speed is updated. Businesses that are slow and unable to catch up with the trend of the times will only fail."

Although located in the northern latitudes and mainly in cloudy weather, Germany is still the largest solar photovoltaic market. This is mainly due to the government's mandatory law - the public utility company must be at a price higher than the market price, that is, the mandatory on-grid price, buy solar power, which laid the world's top photovoltaic energy testing ground in Germany. Due to the price cuts of photovoltaic modules, the price of German solar power has fallen by half in the past five years, and now the price of solar power per kilowatt-hour is only a few cents higher than the price of conventional electricity. From January 1 this year, the German government has reduced the PV subsidies by 15% and will drop by 9% by the middle of this year. According to the German BSW Solar Energy Industry Association, when the price of solar power is on a par with the price of traditional fossil energy and electricity, it is the time when subsidies are cancelled.

Driven by the mandatory on-grid price, Germany has newly installed 14 million kilowatts of photovoltaic power in the past two years and currently has a total installed capacity of 24 million kilowatts, accounting for nearly 4% of the country’s electricity demand. It is expected that this figure will increase to 10 by 2020. %.

“In the past few years, the development speed of the German solar energy industry is incredible.” Martin Ginek, head of the environmental policy department of the Berlin Free University, said: “Although it is an inexhaustible source of energy, Solar energy is more expensive to use, but once the investment in capital equipment has been effective, solar energy has also turned into a cheap energy source. In theory, subsidies will eventually disappear, and this trend is emerging in Germany."

However, solar photovoltaics are still a relatively expensive energy source. Even in Germany, consumers have to pay for the additional costs of up to 7 billion euros per year. In 2000, Germany promulgated the "Renewable Energy Law" and carefully planned the development of solar energy throughout the country. In the past 10 years, the incentive policy was mainly used to install 1 million rooftop solar photovoltaic panels.

According to Philip Rosler, Germany’s Minister of Economy, Germany’s annual installed capacity of solar power should not exceed 1 million kilowatts. "Because we want to make sure our electricity is within acceptable limits," said Rosler.

Tom Meyer, chief economist at Deutsche Bank, believes that subsidies to the solar PV industry were reasonable in the past, but it is exactly the same time to cut subsidies by 30% to 40%, because now the PV price per kilowatt-hour fell by 15 euro cents. "Since technology is mature, high subsidies are no longer necessary," Meyer said in a survey report. "Even if this may cause some companies to go bankrupt, the top companies in the world market are fully capable of coping with the impact of low prices." ."

“The sharp drop in photovoltaic electricity prices, making it increasingly close to other cheap electricity, is a very noteworthy point.” Peter Amelers, head of the German Environmental Assistance Association, optimistically estimates that “the price of photovoltaic electricity in Germany will be equal to the average price of the grid next year. This is 3 years earlier than expected."

With the prevalence of photovoltaic power generation and the decline in the prices of photovoltaic modules, the German government is accelerating the reduction of photovoltaic power price subsidies and plans to reduce subsidies to below 20 euro cents in the second half of the year.

Claudia Kenfitt, an energy expert at the DIW economic think tank, also believes that the reduction in photovoltaic power prices in Germany is mainly due to economies of scale and technological innovation. As the photovoltaic industry becomes more independent, the government should accelerate the reduction of financial subsidies. "Competition is very harsh at any time." She said, "The market economy is about the survival of the fittest."

U.S. economist Yanfu Jin further said: "Germany is leading the world market trend, solar power prices will continue to fall, from now until 2015, there will be more countries to achieve solar power prices and grid average price, which It is a good thing. By 2020, the world will not need subsidies."